Professional Documents
Culture Documents
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 2287 OF 2009
Dashrath Rupsingh Rathod
..Appellant
Versus
State of Maharashtra & Anr.
..Respondents
WITH
CRIMINAL APPEAL NO. 1593 OF 2014
[Arising out of S.L.P.(Crl.)No.2077 of 2009];
CRIMINAL APPEAL NO. 1594 OF 2014
[Arising out of S.L.P.(Crl.)No.2112 of 2009];
CRIMINAL APPEAL NO. 1595 OF 2014
[Arising out of S.L.P.(Crl.)No.2117 of 2009];
CRIMINAL APPEAL NOS. 1596-1600 OF 2014
[Arising out of S.L.P.(Crl.)Nos.1308-1312 of 2009];
CRIMINAL APPEAL NO.1601 OF 2014
[Arising out of S.L.P.(Crl.)No.3762 of 2012];
CRIMINAL APPEAL NO. 1602 OF 2014
[Arising out of S.L.P.(Crl.)No.3943 of 2012];
CRIMINAL APPEAL NO.1603 OF 2014
[Arising out of S.L.P.(Crl.)No.3944 of 2012]; AND
CRIMINAL APPEAL NO. 1604 OF 2014
[Arising out of S.L.P.(Crl.)No.59 of 2013].
Page1
JUDGMENT
VIKRAMAJIT SEN, J.
Leave granted in Special Leave Petitions.
1.
These
to
Courts
complaints
territorial
filed
jurisdiction
under
Chapter
concerning
XVII
of
the
This
is
amply
adumbrated
by
the
Orders
dated
3.11.2009 in I.A.No.1 in CC 15974/2009 of the threeJudge Bench presided over by the then Honble the Chief
Justice of India, Honble Mr. Justice V.S. Sirpurkar and
Honble Mr. Justice P. Sathasivam which SLP is also
concerned with the interpretation of Section 138 of the
NI Act, and wherein the Bench after issuing notice on the
petition directed that it be posted before the three-Judge
Bench.
PRECEDENTS
2.
Page2
Page3
significant
because
in
subsequent
judgment
of
appears
that
Harman
transacted
business
out
of
In those
Page4
It then went on to
We respectfully
Page5
two
decades
the
manipulative abuse of
territorial
Page6
Page7
would
not
confer
or
create
territorial
of
the
Complainant
an
integral
nay
nuclear
the
previously
published
view;
it
is
certainly
Page8
period,
Bhaskaran
has
been
significantly
Page9
10
6.
What is
Page10
11
two-Judge
Bench
in
Shamshad
Begum
v.
B.
Courts
jurisdiction.
in
that
city
possessed
territorial
The
two-Judge
Bench
decision
in
Mosaraf
Page11
12
the
accused-company
Ernakulam,
Kerala
which
where
had
its
significantly
headquarters
the
in
accused-
by
the
accused-company
that
it
was
Bhaskaran
was
followed,
Courts
in
Ernakulam
important
to
italicize
that
there
is,
was
an
Page12
13
The
territorial
jurisdiction
conundrum
which,
In Nishant the
Bank,
Guwahati
in
favour
of
complainant-
Page13
14
The
The
Page14
15
Page15
16
It is our
dishonour
of
the
cheque
alone,
and
it
is
the
We
have
also
painstakingly
perused
Escorts
of
vesting
jurisdiction
upon
that
place.
Page16
17
held
not
to
clothe
that
Court
with
territorial
Page17
18
A plain
Page18
19
Patel
Page19
20
In
The
Courts are
Page20
21
RELEVANT PROVISIONS
12.
Page21
22
dice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with
fine which may extend to twice the amount of the cheque, or with
both:
Provided that nothing contained in this section shall apply
unless(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or
within the period of its validity, whichever is earlier.
(b) the payee or the holder in due course of the cheque, as
the case may be, makes a demand for the payment of the
said amount of money by giving a notice in writing, to
the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the
return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of
the said amount of money to the payee or, as the case
may be, to the holder in due course of the cheque,
within fifteen days of the receipt of the said notice.
Explanation. For the purposes of this section, debt or
other liability means a legally enforceable debt or other liability.
142. Cognizance of offences.-Notwithstanding anything
contained in the Code of Criminal Procedure, 1973 (2 of 1974)-
Page22
23
Page23
24
PARLIAMENTARY DEBATES
13.
Page24
25
The Finance
like
illiteracy,
indispensable
necessities,
Page25
26
The possibility of
Page26
27
the
dishonour
except
in
limited
Parliament was
Page27
28
We
have
already
cautioned
against
the
Page28
29
Page29
30
Page30
31
indicates
or
enumerates
the
extraordinary
of
which
such
as
is
dependent
obtainment
on
of
extraneous
sanction
for
Page31
32
Page32
33
of
Greater
Bombay
(1999)
SCC
577.
Page33
34
Black Law
Page34
35
with,
the
already
committed
crime
remains
concur
with
Bhaskaran
To this extent we
in
that
the
Page35
36
We,
however, are of the view that so far as the offence itself the
proviso has no role to play. Accordingly a reading of Section
138 NI Act in conjunction with Section 177, CrPC leaves no
manner of doubt that the return of the cheque by the
drawee bank alone constitutes the commission of the
offence and indicates the place where the offence is
committed.
17.
to
proceed
under
that
provision.
An
Page36
37
Todays
Page37
38
Page38
39
19.
which
itself
to
us
is
that
the
offence
Page39
40
One
However, keep-
Page40
41
not commend itself to us. Consequent on considerable consideration we think it expedient to direct that only those
cases where, post the summoning and appearance of the alleged Accused, the recording of evidence has commenced as
envisaged in Section 145(2) of the Negotiable Instruments
Act, 1881, will proceeding continue at that place. To clarify,
regardless of whether evidence has been led before the Magistrate at the pre-summoning stage, either by affidavit or by
oral statement, the Complaint will be maintainable only at
the place where the cheque stands dishonoured. To obviate
and eradicate any legal complications, the category of Complaint cases where proceedings have gone to the stage of
Section 145(2) or beyond shall be deemed to have been
transferred by us from the Court ordinarily possessing territorial jurisdiction, as now clarified, to the Court where it is
presently pending.
Page41
42
such Complaints are filed/refiled within thirty days of their return, they shall be deemed to have been filed within the time
prescribed by law, unless the initial or prior filing was itself
time barred.
DISPOSAL OF PRESENT APPEALS
Crl. Appeal No.2287 of 2009
21. A learned Single Judge of the High Court of Judicature at
Bombay, Nagpur Bench has, pursuant to a threadbare
discussion
of
Bhaskaran
concluded
that
since
the
Page42
43
this
Appeal
the
Respondent-accused,
having
Page43
44
S.L.P.(Crl.)No.2077
of
2009,
these
Appeals
stand
dismissed.
Crl. Appeal Nos.1596-1600 of 2014
[Arising out of S.L.P.(Crl.)Nos.1308-1312 of 2009]
24. The Appellant-complainant herein has its Registered
Office in Delhi from where the Respondents-accused are also
Page44
45
were
presented
and
dishonoured
at
Nagpur,
Upon cheques
On appeals
Page45
46
Page46
47
It appears
Page47
48
amount
has
already
been
filed
in
Delhi.
We
may
prosecution.
Whilst
the
clause
restricting
However, the
Page48
49
.......................................................J.
[T.S. THAKUR]
.......................................................J.
[VIKRAMAJIT SEN]
...............J.
[C. NAGAPPAN]
New Delhi
August 1, 2014.
Page49
50
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.2287 OF 2009
DASHRATH RUPSINGH RATHOD
Appellant
Versus
STATE OF MAHARASHTRA & ANR.
Respondents
WITH
CRIMINAL APPEAL NO. 1593 OF 2014
(Arising out of S.L.P. (Crl.) No.2077 of 2009)
CRIMINAL APPEAL NO. 1594 OF 2014
(Arising out of S.L.P. (Crl.) No.2112 of 2009)
CRIMINAL APPEAL NO. 1595 OF 2014
(Arising out of S.L.P. (Crl.) No.2117 of 2009)
CRIMINAL APPEAL NO. 1596-1600 OF 2014
(Arising out of S.L.P. (Crl.) Nos.1308-1312 of 2009)
CRIMINAL APPEAL NO. 1601 OF 2014
(Arising out of S.L.P. (Crl.) No.3762 of 2012)
CRIMINAL APPEAL NO. 1602 OF 2014
(Arising out of S.L.P. (Crl.) No.3943 of 2012)
CRIMINAL APPEAL NO. 1603 OF 2014
(Arising out of S.L.P. (Crl.) No.3944 of 2012)
AND
CRIMINAL APPEAL NO. 1604 OF 2014
(Arising out of S.L.P. (Crl.) No.59 of 2013)
Page50
51
JUDGMENT
T.S. Thakur, J.
1.
reason for
that I
case
only
propose
stands out as
Page51
52
two-judge Bench of this Court who took the view that the
jurisdiction to try an offence under Section 138 could not be
determined only by reference to the place where the cheque was
dishonoured. That is because dishonour of the cheque was not by
itself an offence under Section 138 of The Negotiable Instruments
Act, 1881, observed the Court. The offence is complete only when
the drawer fails to pay the cheque amount within the period of
fifteen days stipulated under clause (c) of the proviso to Section
138 of the Act. Having said that the Court recognised the difficulty
in fixing a place where such failure could be said to have taken
place. It could, said the Court, be the place where the drawer
resides or the place where the payee resides or the place where
either of them carries on business. To resolve this uncertainty the
Court turned to Sections 178 and 179 of the Cr.P.C. to hold that
since an offence under Section 138 can be completed only with the
Page52
53
178. (a)-(c)
*
*
*
(d) where the offence consists of several acts done in
different local areas, it may be enquired into or tried
by a court having jurisdiction over any of such local
areas.
Thus it is clear, if the five different acts were done in five
different localities any one of the courts exercising jurisdiction in one of the five local areas can become the place of
trial for the offence under Section 138 of the Act. In other
words, the complainant can choose any one of those courts
having jurisdiction over any one of the local areas within the
territorial limits of which any one of those five acts was
Page53
54
done. As the amplitude stands so widened and so expansive
it is an idle exercise to raise jurisdictional question regarding
the offence under Section 138 of the Act.
2.
Bhaskaran held the field for two years. The first blow to the
This
Court
resolved
the
cleavage
in
those
Page54
55
It, however, does not mean that the cheque is always to be
presented to the drawers bank on which the cheque is issued. However, a combined reading of Sections 3, 72 and
138 of the Act would clearly show that the law mandates the
cheque to be presented at the bank on which it is drawn if
the drawer is to be held criminally liable. Such presentation
is necessarily to be made within six months at the bank on
which the cheque is drawn, whether presented personally or
through another bank, namely, the collecting bank of the
payee.
3.
Ishar Alloys case (supra) did not deal with the question of
Page55
56
payee can deposit his cheque in any bank of his choice at any
place.
bank
for
collection
from
the
drawee
bank,
but
such
Panasonic India (P) Ltd. (2009) 1 SCC 720. That was a case
where the complaint under Section 138 was filed in a Delhi Court,
only because the statutory notice required to be issued under the
proviso to Section 138 was issued from Delhi. If Bhaskaran was
Page56
57
constitute
an
offence.
The
proviso
Page57
58
quired to be fulfilled before cognizance of the offence can be
taken. If the ingredients for constitution of the offence laid
down in provisos (a), (b) and (c) appended to Section 138
of the Negotiable Instruments Act are intended to be applied
in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of
action for filing a complaint. As it is only on receipt of the
notice that the accused at his own peril may refuse to pay
the amount. Clauses (b) and (c) of the proviso to Section
138 therefore must be read together. Issuance of notice
would not by itself give rise to a cause of action but communication of the notice would.
6.
7.
Page58
59
from
where
the
notice
was
issued
questioned.
Even
Page59
60
jurisdiction to deal with the matter. While saying so, the Court tried
to distinguish the three-Judge Bench decision in Ishar Alloy
Steels (supra) and that rendered in Harman Electronics case
(supra) to hold that the ratio of those decisions did not dilute the
principle stated in Bhaskaran case. That exercise was repeated by
this Court in FIL Industries Ltd. v. Imtiyaz Ahmad Bhat
(2014) 2 SCC 266 and in Escorts Ltd. v. Rama Mukherjee
(2014) 2 SCC 255 which too followed Bhaskaran and held that
complaint under Section 138 Negotiable Instrument Act could be
instituted at any one of the five places referred to in Bhaskarans
case.
9.
Bench that heard the above cases, found it difficult to follow suit
and subscribe to the view stated in Bhasakaran. The reasons are
not far too seek and may be stated right away.
10. Section 138 is a penal provision that prescribes imprisonment
upto two years and fine upto twice the cheque amount. It must,
therefore, be interpreted strictly, for it is one of the accepted rules
Page60
61
Page61
62
Page62
63
punishable under section 138.
(b)
(c)
12. A
proper
understanding
of
the
scheme
underlying
the
Page63
64
fails to pay the amount within the statutory period prescribed for
such payment.
this was done. The Parliament in its wisdom considered it just and
proper to give to the drawer of a dishonoured cheque an
opportunity
to
pay
up
the
amount,
before
permitting
his
This
legislate so to
Page64
65
added the words and the drawer has despite receipt of a notice
demanding the payment of the amount, failed to pay the same
within a period of fifteen days from the date of such demand made
in writing by a notice.
Page65
66
That a
proviso is an exception to the general rule is well settled. A proviso is added to an enactment to qualify or create an exception to
what is contained in the enactment. It does not by itself state a
general rule. It simply qualifies the generality of the main enactment, a portion which but for the proviso would fall within the main
enactment.
15. The P. Ramanatha Aiyar, Law Lexicon, 2nd Edition, Wadhwa &
Co. at page 1552 defines proviso as follows:
The word proviso is used frequently to denote the clause
the first words of which are provided that inserted in deeds
and instruments generally. And containing a condition or
stipulation on the performance or non-performance of which,
as the case maybe. The effect of a proceeding clause or of
the deed depends.
A Clause inserted in a legal or formal document, making
some condition, stipulation, exception or limitation or upon
the observance of which the operation or validity of the
instrument depends [ S. 105, Indian Evidence Act].
A proviso is generally intended to restrain the enacting
clause and to except something which would have otherwise
been within it or in some measure to modify the enacting
clause...
Page66
67
16. To quote Craies on Statute Law, 7th Edn., Sweet & Maxwell
at page 220 If the principal object of the Act can be accomplished
and stand under the restriction of the saving clause or proviso, the
same is not to be held void for repugnancy.
17. One of the earliest judgments on the subject is a three Judge
Bench decision in
Page67
68
Page68
69
Page69
70
naught the real object of the main enactment, unless the words of the proviso
are such that it is its necessary effect.
(emphasis supplied)
21. The same line of reasoning was followed in A.N. Sehgal and
Ors. v. Raje Ram Sheoram and Ors. 1992 Supp (1) SCC 304
while interpreting a proviso in the Haryana Service of Engineers
Rules, 1960 where the Court held that the proviso to Rule 5(2)(a)
cannot be applied to confer the benefit of regular appointment on
every promotee appointed in excess of 50% quota. This Court
harmoniously read the main provision and the proviso and gave
effect to the rule.
22. In Kerala State Housing Board and Ors. v. Ramapriya
Hotels (P) Ltd. and Ors. 1994 (5) SCC 672 this Court was examining whether the period of 4 years envisaged in proviso to Section 16(i) under Kerala Land Acquisition Act, 1961 could be reckoned from date when agreement was executed or from date of
publication of notification under Section 3(1) of the Act after the
agreement was executed. After relying on Tribhovandas Haribhai Tamboli (supra) and A.N. Sehgal (supra) this Court held that
Page70
71
23. In Kush Sahgal & Ors. v. M.C. Mitter & Ors. (2000) 4
SCC 526 a landlady made an application for eviction of the tenant
on the basis that she wanted the place for business purposes which
was not allowed as per the proviso to Section 21(2) U.P. Urban
Buildings (Regulation of Letting, Rent and Eviction) Act, 1972. The
Court examined the role and purport of the proviso and observed :
This we say because the normal function of a proviso is to
except something out of the enactment or to qualify
something enacted therein which but for the proviso would
be within the purview of the enactment. (See : Kedarnath
Page71
72
Jute Manufacturing Co. Ltd. v. Commercial Tax Office
[1965]3SCR626). Since the natural presumption is that but
for the proviso, the enacting part of the section would have
included the subject-matter of the proviso, the enacting part
has to be given such a construction which would make the
exceptions carved out by the proviso necessary and a
construction which would make the exceptions unnecessary
and redundant should be avoided (See: Justice G. P. Singh's
"Principles of Statutory Interpretation" Seventh Edition
1999, p-163). This principle has been deduced from the
decision of the Privy Council in Govt. of the Province of
Bombay v. Hormusji Manekji (AIR 1947 PC 200) as also the
decision of this Court in Durga Dutt Sharma v.Navaratna
Pharmaceutical Laboratories (AIR 1965 SC 980).
24. To the same effect are the decisions of this Court in Ali M.K.
and Ors. v. State of Kerala and Ors. (2003) 11 SCC 632,
Nagar Palika (supra) and in Steel Authority of India Ltd. v.
S.U.T.N.I Sangam & Ors. (2009) 16 SCC 1.
25. In conclusion, we may refer to Maxwell, Interpretation of
Statutes Edn. 12, 1969, on P. 189-190 which states that it is a
general finding and practice that inconsistencies can be avoided
by applying the general rule that the words of a proviso are not to
be taken absolutely in their strict literal sense [R v. Dimbdin
(1910)] but that a proviso is of necessity ... limited in its operation to the ambit of the section which it qualifies [Lloyds and Scottish Finance Ltd v. Modern Cars and Canavans (Kingston) Ltd.
Page72
73
Court
Page73
74
179 of the Cr.P.C. But the confusion arises only if one were to treat
the proviso as stipulating the ingredients of the offence. Once it is
held that the conditions precedent for taking cognizance are not
the ingredients constituting the offence of dishonour of the cheque,
there is no room for any such confusion or vagueness about the
place where the offence is committed.
recognised under Section 177 of the Cr.P.C. that all offences are local, the place where the dishonour occurs is the place for commission of the offence vesting the Court exercising territorial jurisdiction over the area with the power to try the offences. Having said
that we must hasten to add, that in cases where the offence under
Section 138 is out of the offences committed in a single transaction
within the meaning of Section 220 (1) of the Cr.P.C. then the offender may be charged with and tried at one trial for every such
offence and any such inquiry or trial may be conducted by any
Court competent to enquire into or try any of the offences as provided by Section 184 of the Code. So also, if an offence punishable
under Section 138 of the Act is committed as a part of single trans-
Page74
75
action with the offence of cheating and dishonestly inducing delivery of property then in terms of Section 182 (1) read with Sections
184 and 220 of the Cr.P.C. such offence may be tried either at the
place where the inducement took place or where the cheque forming part of the same transaction was dishonoured or at the place
where the property which the person cheated was dishonestly induced to deliver or at the place where the accused received such
property.
Page75
76
Page76
77
Page77
78
Page78
79
30. MSR Leathers (supra) also looked at Section 138 and held
that a complaint could be filed under Section 138 after cause of
action to do so had accrued in terms of clause (c) of the proviso to
Section 138 which happens no sooner the drawer of the cheque
fails to make the payment of the cheque amount to the payee
within fifteen days in terms of clause (b) to proviso to Section 138.
MSR Leathers was not so much concerned with the question
whether the proviso stipulated ingredients of the offence or
conditions precedent for filing a complaint. It was primarily
concerned with the question whether the second or successive
dishonour followed by statutory notices and failure of the drawer to
make payment could be made a basis for launching prosecution
against the drawer.
Page79
80
High
Page80
81
only insists on certain conditions precedent which have to be
satisfied if the person who is deemed to have committed the
offence were to be prosecuted successfully. The offence is
already committed when the cheque is returned by the
bank. But the cause of action for prosecution will be
available to the complainant not when the offence is
committed but only after the conditions precedent
enumerated in the proviso are satisfied. After the offence is
committed, only if the option given to avoid the prosecution
under the proviso is not availed of by the offender, can the
aggrieved person get a right or course of action to prosecute
the offender. The offence is already deemed and declared
but the offender can be prosecuted only when the
requirements of the proviso are satisfied. The cause of
action for prosecution will arise only when the period
stipulated in the proviso elapses without payment.
Ingredients of the offence have got to be distinguished from
the conditions precedent for valid initiation of prosecution.
The stipulations in the proviso must also be proved
certainly before the offender can be successfully prosecuted.
But in the strict sense they are not ingredients of the
deemed offence under the body of Section 138 of the N.I.
Act, though the said stipulations; must also be proved to
ensure and claim conviction. It is in this sense that it is said
that the proviso does not make or unmake the offence
under Section 138 of the N.I. Act. That is already done by
the body of the Sections. This dispute as to whether the
stipulations of the proviso are conditions precedent or
ingredients/components of the offence under Section 138 of
the N.I. Act may only be academic in most cases.
Undoubtedly the ingredients stricto sensu as also the
conditions precedent will have to be established
satisfactorily in all cases. Of course in an appropriate case it
may have to be considered whether substantial compliance
of the conditions precedent can be reckoned to be sufficient
to justify a conviction. Be that as it may, the distinction
between the ingredients and conditions precedent is
certainly real and existent. That distinction is certainly vital
while ascertaining complicity of an indictee who faces
indictment in a prosecution under Section 138 with the aid
Page81
82
of Section 141 of the N.I. Act. That is how the question
assumes such crucial significance here.
Page82
83
Page83
84
Page84
85
Page85
86
Page86
87
....J.
(T.S. Thakur)
New Delhi
August 1, 2014
Page87